Page 18 - TURKRptJun19

Russia is “ready to cooperate” with Turkey for a sale of its new- generation Su-57 fighter jet in the event that Ankara government and Turkish companies are expelled from the US-led F-35 stealth fighter jet programme, according to a senior Russian defense official cited by Defense News.
Brussels raises “deeper concerns over functioning” of Turkey’s market economy. The European Commission used its latest annual progress report on Turkey’s EU membership application to warn that the human rights consequences of the Erdogan administration’s authoritarian rule meant the country’s accession talks were at a standstill, but it also took aim at deepening concerns over the functioning of the country’s market economy. A sharp deterioration in external financing conditions in 2018—a year in which a currency crisis in the country plunged it into recession and left companies facing piles of foreign currency-denominated debt that threaten to become unrepayable—exposed Turkish vulnerabilities built up over years, it said. “But a range of policy actions the Turkish authorities took in response only negatively affected the functioning of the markets by interfering with price formation and introducing constraints on the free use of foreign exchange,” the report said. “Serious backsliding continued in the Turkish economy, leading to deeper concerns over the functioning of the country’s market economy,” it added.
Fight against corruption ‘sorely lacking’. The Commission also underlined its mounting concerns regarding Turkey’s key economic institutions and said the fight against corruption was sorely lacking. “There was no progress in improving the transparency of state aid,” it said. Even though the report pointed to serious institutional and structural problems of the Turkish economy—some observers see things as so irretrievably bad that a sovereign default cannot be ruled out—it praised the progress and good level of preparations Ankara has made to cope with competitive pressures and market forces within the EU. It particularly underlined the improvements made in the energy sector, as well as advances in spending on research and development, education and physical capital. “However, there are persistent problems with the quality of education and gender equality,” the report added. In its spring economic forecast, the Commission said Turkey would record the worst growth performance among emerging economies in 2019. Financial conditions were expected to remain volatile in the first half of the year with interest rates and the stock market entering a more tranquil phase later in the year, it argued. The Commission forecast that the Turkish economy would contract 2.3% this year but would recover to see a growth rate of 3.9% in 2020.
“Further serious backsliding” under authoritarian rule means Turkey’s EU application is at “standstill”: Commission. For a couple of years now the word in diplomatic circles has been that Turkey’s application to join the European Union has essentially been indefinitely frozen because of the Erdogan administration’s disregard for human rights. That scenario was confirmed on May 29 by an annual progress report issued by the European Commission. Authoritarian rule was responsible for worse conditions in courts, prisons and also the economy, the bloc’s executive concluded. The past year had seen “further serious backsliding” on rights, the judiciary and economic policy, it added. “Turkey has continued to move further away from the European Union,” the Commission said in its yearly report on how far Ankara has come along the path to EU membership since it formally applied for that status in 2005. It also noted: “Negotiations have... effectively come to a standstill.” EU governments will be asked to approve the report in June. Following the July 2016 attempted coup, the Erdogan administration introduced a state of emergency which lasted for two years. The emergency regime was only lifted after, in June 2018, President Recep Tayyip Erdogan was made the country’s first executive president with sweeping powers and only a diminished parliament and no prime minister to contend with. The Commission observed that many of the “repressive elements” introduced by the state of emergency became law. The massive crackdown on citizens allegedly associated with the Gulenist network that Ankara claims orchestrated
18 TURKEY Country Report June 2019 www.intellinews.com